No they're not. You misunderstand; the original patent doesn't expire. It's EXTENDED. The original drug does not go into any public domain to be manufactured or built on by other companies.
Many drug manufacturers make generic drugs, but that number has decreased, which has led to behavior like the larger original drug manufacturers. I won't allege outright collusion, but it's crazy when everyone in an industry starts agreeing at one time that a medicine isn't profitable... Leaving a strong demand and opportunity for any one of them to step in and clean up... And no one does.
And before anyone wants to jump into the cost of research, some pharma businesses like GSK, spend about twice on sales and business costs than they do research[0]. And then there's the amount they DO contribute that gives patenting applicability to mostly public research.
It's quite depressing.
[0]http://www.gsk.com/investors/reps11/GSK-Annual-Report-2011.p...
Around page 136, I think.